Leave a Legacy of Hope and Healing

Thank you for your interest in learning more about how legacy gifts, put into place now, can help you provide a secure future for your loved ones and support the Mercy Ships mission well into the future. A legacy gift is a lasting investment in Mercy Ships, advancing our mission and ensuring our ability to help those in need for years to come.

For over 40 years, the heart of Mercy Ships has focused on bringing hope and healing to the forgotten poor. Our fleet of state-of-the-art hospital ships bring world-class healthcare and medical training to regions where clean water, reliable electricity, and medical personnel and supplies are limited or even nonexistent. Onboard our hospital ships, staffed by volunteer professionals from around the world, surgeries are performed that transform the lives of people who might otherwise face a lifetime of suffering. Tumors are removed, orthopedic conditions are corrected, sight is restored, cleft lips are repaired, and more!

We invite you to consider adding Mercy Ships to your will, leaving a legacy of hope and healing well into the future.

"You can't change the whole world. But you can change the whole world for one person."
-Dr. Gary Parker, volunteer surgeon

Monday May 6, 2024

Bills / Cases / IRS

Deductibility of PPP Expenses

Rev. Rul. 2021-2; 2021-4 IRB 1

Obsoletes Notice 2020-32 and Rev. Rul. 2020-27

This ruling obsoletes Notice 2020-32, 2020-21 I.R.B. 837 (May 18, 2020), and Rev. Rul. 2020-27, 2020-50 I.R.B. 1552 (Dec. 7, 2020), due to the enactment of � 276(a) of the COVID-related Tax Relief Act of 2020 (Act), enacted as Subtitle B of Title II of Division N of the Consolidated Appropriations Act, 2021, Public Law 116-260, 134 Stat.1182 (Dec. 27, 2020).

Notice 2020-32 and Rev. Rul. 2020-27 provide that certain taxpayers (eligible recipients) may not deduct certain otherwise deductible expenses to the extent that the payment of such expenses results (or is expected to result) in the forgiveness of a loan (covered loan) guaranteed under the Paycheck Protection Program authorized under � 7(a)(36) of the Small Business Act (15 U.S.C. 636(a)(36)) (SBA), as enacted by � 1102 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), Public Law 116-136, 134 Stat. 281, 286-93 (Mar. 27, 2020). Section 1106(b) of the CARES Act provides for the forgiveness of covered loans and � 1106(i) of the CARES Act provides, for purposes of the Internal Revenue Code, that any amount that otherwise would be includible in an eligible recipient's gross income by reason of such forgiveness is excluded from gross income.

Section 1106(i) of the CARES Act was redesignated, and transferred to � 7A(i) of the SBA, and amended by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, which was enacted as Title III of Division N of the Consolidated Appropriations Act, 2021. Section 276(a) of the Act amended � 7A(i) of the SBA to provide that no amount shall be included in the gross income of the eligible recipient by reason of forgiveness of indebtedness described in � 7A(b) of the SBA. See � 7A(i)(1) of the SBA. In addition, � 276(a) provides that no deduction shall be denied, no tax attribute shall be reduced, and no basis increase shall be denied, by reason of the exclusion from gross income provided by � 7A(i)(1) of the SBA. See � 7A(i)(2) of the SBA. The amendment made by � 276(a) of the Act applies to taxable years ending after March 27, 2020, the date of the enactment of the CARES Act. See � 276(a)(2) of the Act.

As a result of the amendment made by � 276(a) of the Act regarding the Federal income tax consequences of covered loan forgiveness, the conclusion stated in Notice 2020-32, and the holding stated in Rev. Rul. 2020-27, are no longer accurate statements of the law. Accordingly, Notice 2020-32 and Rev. Rul. 2020-27 are declared obsolete as of the effective date of the amendment made by � 276(a) of the Act.

DRAFTING INFORMATION

The principal authors of this revenue ruling are Charles Gorham, Charles Magee and Bruce Chang, Office of the Associate Chief Counsel (Income Tax & Accounting). For further information regarding this revenue ruling, please contact Mr. Chang at (202) 317-4870 or Patrick Clinton at (202) 317-4651 (not toll-free numbers).